Few hurt by health-insurance policy cancellations, study shows

Friday

Nov 22, 2013 at 12:01 AMNov 22, 2013 at 11:17 AM

Fewer than 6 percent of Americans younger than 65 have individual health plans, and most don't stand to lose their coverage without the promise of better insurance at a discount, according to a new report from Families USA.

Misti Crane, The Columbus Dispatch

Fewer than 6 percent of Americans younger than 65 have individual health plans, and most don’t stand to lose their coverage without the promise of better insurance at a discount, according to a new report from Families USA.

Furthermore, many of the policyholders wouldn’t renew them anyway, says the group, which pushed for health-care reform.

According to the report, 71 percent of the 15.2 million people in the individual marketplace have incomes at or below 400 percent of the poverty level, or $94,200 for a family of four. That means they should get help buying new insurance or should be eligible for expanded Medicaid in those states that have broadened eligibility.

And the average duration for individual coverage is short — eight months, the report says. In the past, about one-third of individual policyholders bought insurance that lasted longer than a year.

When you figure those two things together, less than 1 percent of non-elderly Americans stand to lose an individual plan they want to keep without being offered financial help to buy a new one, Families USA Executive Director Ron Pollack said yesterday.

“This issue has been blown out of proportion,” he said.

The issue has plagued President Barack Obama, who promised that people who liked their health plans could keep them. Instead, some have been getting cancellation notices from insurance companies that say the plans are no longer being offered because they don’t comply with the Affordable Care Act.

Obama has since said he will allow those companies to extend the plans for another year.

Pollack acknowledged that the plans those people will be able to buy might be more expensive than their previous plans, but he said that better coverage will mean less out-of-pocket cost when they need care.

In Ohio, 506,000 people, or 5.2 percent, had individual coverage, based on data from 2010 and 2011.

Of those people, 3 out of 4 had an income at or below 400 percent of the poverty level, according to the report. It estimates that 0.5 percent of Ohioans have income above the poverty cutoff and could be hurt because individual policies they want to keep have been canceled.

Chris Brock, spokesman for the Ohio Department of Insurance, said he could not verify or refute the numbers in the report. But he said the toll on those with private insurance should not be minimized.

“These were millions of people who were told ‘If you like your plan you can keep it,’ and that turned out not to be true.”

Brock said many don’t view their current plans as substandard and are quite happy with them.

Larry Levitt, senior vice president at the Kaiser Family Foundation, said the report is basically on point, although it does not address those states that have not adopted Medicaid expansion.

“There’s been a lot of hullabaloo about these cancellations, but I think it’s clear that they affect a very small percentage,” Levitt said.

There already is a significant amount of turnover in the individual market, which has not gotten a lot of attention, Levitt said.

Many people drop individual coverage when they get a job, as do early retirees when they age into Medicare.

Miranda Motter, president of the Ohio Association of Health Plans, said she was not able to review and comment on the report yesterday.